AFRICA – Bharti Airtel Ltd, the India based telecommunications company plans to raise US$200 million (Rs 1400 crore from Qatar’s state-owned holding company, Qatar Investment Authority, to pay debt at its Africa unit.
The company which provides GSM, 3G, 4G LTE mobile services, fixed line broadband and voice services has been struggling in the market with stiff competition from local service providers in respective markets.
Bharti Airtel, controlled by billionaire Sunil Mittal, recently offloaded 32% stake in Bharti Infratel, valued at close to US$2.17 billion (Rs 15,500 crore) to bolster its countrywide network.
The stake was sold to Warburg Pincus, Temasek, Singtel, SoftBank Group International and two others.
Reliance Jio Infocomm Ltd., controlled by India’s richest man Mukesh Ambani, drove down profits of rivals first through free services and then rock-bottom pricing, leading to exit or merger of small operators.
Bloomberg Quint reports that the competition also increased Bharti Airtel’s debt to more than US$14 billion (Rs 1 lakh crore) and increased its leverage.
In the quarter ended September, the company is said to have spent a little more than Rs 7,600 crore (US$1.06 billion) on capital plans to spend Rs 10,000 crore (US$1.40 billion) more in the rest of 2018-19.
in a tossed market, the company also decided to sell 20% stake in DTH arm to Warburg Pincus for US$350 million to reduce its debt burden.
Airtel has been monetising its non-core assets to pare debt and fund activities to fight intensified competition in the telecom sector.
On the continent, it has more than 9.4 crore (94 million) subscribers and an average revenue per user of close to US$2.80, higher than its India telecom operations.
In the 12 months ended September, Africa contributed more than Rs 21,000 crore (US$2.94 billion) in sales while net profit rose on the back of cost cuts, which reflected on its margin.